Since the start of the COVID-19 pandemic, the struggle to find warehouse workers had been a common theme in the logistics world. This struggle continued until the middle of 2022, when inflation started to rise, and consumer spending began to dip. Now, instead of a mad scramble to hire, many warehousing companies are letting associates go.
If your company is tired of riding the warehouse labor seesaw, read on to learn how a third-party logistics company (3PL) can remove this volatility from your operations
Rewind to 2021: warehouse labor shortage
When the pandemic hit in 2020, it changed the way people shopped. With people stuck at home, eCommerce sales went through the stratosphere. And, as eCommerce fulfillment is much more labor-intensive than B2B/retail fulfillment, the need for warehouse labor skyrocketed almost overnight.
Competition for warehouse associates reached a fever pitch, with companies paying wages that would have been unthinkable just a few months earlier. From 2020 through the first half of 2022, efforts to attract, hire, and retain employees was job #1 for the HR departments of warehousing companies across the US.
The current picture: too many associates
Once consumer spending began to subside in mid-2022, however, hiring began to slow. The job cuts soon followed.
According to a November 2022 article in The Wall Street Journal, warehousing providers cut 20,000 jobs between September and October 2022. This marked the fourth straight month where warehousing jobs declined, with employment in the warehousing and storage sector declining by 50,000 jobs between June and November.
Many companies are continuing to lay off warehouse associates. Amazon, the largest eCommerce company in the US, began laying workers off in November and has plans to eliminate as many as 18,000 jobs.
Continue to ride the labor seesaw – or leave it to a 3PL?
If your company performs its own warehousing operations, does the above sound all too familiar? Did you struggle to attract, hire and retain associates, only to become overstaffed when sales volumes declined?
And, if you’re currently laying off associates, what will you do when volumes necessitate a new round of hiring?
Do you have the staffing resources to ride this seesaw where you’re adding employees, laying them off, adding employees, etc.? Most companies don’t – and fortunately you don’t need to.
By partnering with a 3PL warehousing provider, you can flex your warehousing services so that your space and labor can expand and contract to match your sales volumes.
On the labor front, 3PLs have resources that are solely committed to recruiting and retention, and can provide the following benefits.
- Many 3PLs have multiple distribution centers and can cross train employees to fill in gaps at other locations, as needed.
- 3PLs tend to have close working relationships with temporary staffing agencies, helping to ensure adequate coverage.
- 3PLs are typically well known to prospective employees in their markets, making recruitment easier.
The bottom line is that finding warehouse workers is what a 3PL does. If it’s not a core competency of your company, you may be better off leaving it to an expert.
Leave it to Kanban Logistics to find warehouse workers
If your supply chain requires a strong East Coast presence, you can entrust your warehousing and distribution operations to Kanban Logistics. We have nearly 2 million square feet of prime warehousing space in Eastern North Carolina, midway between Boston and Miami. We also have a strong client roster, which means that we don’t need to reduce our workforce when a client’s sales volumes are slow – we just reallocate them to other business. This creates a better environment for our employees, with more predictable capabilities for our clients.
To learn more about the benefits of partnering with Kanban Logistics, contact us today.